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In July, the Energy Storage Association (ESA) and the American
Clean Power Association (ACP) announced plans to merge, bringing
together leadership in North America's energy storage and renewable
energy industries. If the ESA's membership approves the plan, the
merger will be effective on 1 January 2022.
Net-Zero Business Daily spoke with Jason
Burwen, who has been interim CEO of the ESA since January, about
activity in energy storage and how working through ACP will bring
more resources to defining the landscape for energy storage and
renewables.
Net-Zero Business Daily: Tell us how the merger of the
associations came about and what it means for ESA.
Burwen: The boards of directors of the
organizations have explored this prospect for just under a year….
The ESA board unanimously approved the proposed merger because they
see the organizations providing enhanced value to each other
through a combination of resources.
I think the US energy storage industry is at an inflection point
in its growth. We set before us last year a vision of 100 GW of new
storage by 2030, our 100 x 30 Vision, and we're
going to get there if we have expansive industry resources to
support far-reaching policy advocacy and networking. That
opportunity for having additional resources immediately by working
with ACP will advance ESA's mission in the short term and also in
the longer term for investments in research and education that are
critical to continued market growth.
Net-Zero Business Daily: The merger of the groups brings
to mind the increased frequency with which storage is paired with
new renewable power installations.
Burwen: We see that the business prospects of
the energy storage and renewables industries are increasingly
intertwined. Our 100 x 30 Vision is based on renewable power
providing half of all US electricity by the end of the decade. In a
world where government and industry are increasingly focused on
addressing the climate crisis … it makes good business sense to
have a unified voice.
Net-Zero Business Daily: What are some of the ways
you're seeing storage and renewable power work together now or that
they can work together?
Burwen: Hybrid resources—where storage is
integrated directly with wind, solar, or other generation—are
obviously a rising asset class. We are seeing this in growing
requests for interconnections with the grid.
We also see a significant benefit to stand-alone storage. What
was important in talking to ACP was understanding and reflecting
that … ACP is going to represent storage, whether it is integrated
with renewables or independent. Both are absolutely critical for
[facilitating a] high share of renewable generation.
Net-Zero Business Daily: Let's talk politics. What's the
state of interest and support for storage from the White House and
Congress and the states?
Burwen: There's enormous interest from
policymakers at all levels of government. It's a compelling
proposition. It presents a lot of opportunities to help save people
money by reducing the spare amount of capacity needed on the power
system and the [power transmission] infrastructure.
In particular, storage is going to play an increasing role at
customers' premises for resilience.
Obviously, renewables are where we see the greatest
complementarity, but storage is also going to be helping any supply
mix operate well because of its controllability and
flexibility.
Net-Zero Business News: As you pointed out, storage
helps avoid the cost of overbuilding the system to ensure
reliability. But can we also think of it in reverse: that storage
allows for more rapid growth of renewables because it provides
reliability?
Burwen: Within the context of the need for
decarbonization, absolutely. I think that it depends on how you are
going to balance the system. If you are going to balance by burning
fossil fuels, that has different implications than if you are
moving electrons across the grid at different times [to meet peak
needs]. What makes storage really exciting from a renewables
standpoint is that it's not just this simple balancing
resource—there's so much more about power system operations
that can benefit from widespread power storage.
Net-Zero Business Daily: Can you give our readers an
example?
Burwen: One example is that moment-to-moment
stabilization of the power system [can be achieved], as you go to
higher levels of renewables. Battery energy storage does extremely
well for managing frequency response; all the way up to dealing
with transmission congestion, you are dealing with something that
constrains the delivery of wind and solar to the load centers.
Storage is important to ensure those deliveries can be done and the
system can manage them, in the absence of greater transmission
buildout. And curtailment avoidance is very important to making the
business case for renewables.
Another example is that [we need] … systems that can manage
greater and greater variability without creating the kinds of
stresses that would make a grid operator nervous. [National Renewable Energy Laboratory's] 2019
study shows the value of storage at even just four hours' duration
goes up dramatically as we go to higher levels of renewables, due
to the changing nature of net load shapes.
Storage is a good insurance policy for much more expansion of
renewables, for transmission buildout, for expansion to greater
geographic regions, greater [use] of demand response—there are
so many ways you can modify a power system driven by renewables to
achieve reliability and efficiency. You are going to get backstop
power through storage. This is critical for us to make the changes
at the speed and scale we need to decarbonize the grid.
Net-Zero Business Daily: As a trade group, part of your
mission is education, both of policymakers and the public. What's
the understanding of storage today?
Burwen: Education is a key part of the work.
One of the things that makes the merger powerful is that we will
have the larger megaphone and the resources that ACP has in its
research and education team. That is going to be really important
for making sure this kind of information is reaching those it needs
to and traveling farther than just power system stakeholders.
I think a lot of that is driven by a strong sense that this
technology is here, it's only going to become better performing and
more economically viable, and we should be doing what we can to
take advantage of this opportunity. [Storage is critical] in the
context of decarbonization of the power system, electrification of
our economy, and adapting to the climate-driven weather extremes
that are increasingly frequent. Storage can provide diversification
and resilience.
On top of this, politicians on both sides of the aisle find it
compelling that this industry is growing fast in the US, and US
companies are leading globally. Fluence [owned by Siemens and AES]
is the leading system integrator; companies like Stem and Powin are
putting together energy storage product offerings that are
world-class; and companies like Eos and ESS are manufacturing
here.
We have done the work that other countries have not—to
rethink our power markets and how storage can be compensated for
its flexibility. That's why we're having the opportunity to create
jobs and new investment, and to lead globally toward
decarbonization goals.
Net-Zero Business Daily: Let's look out five years. What
do you think and hope will happen in storage?
Burwen: First, I'm looking forward to how much
more integrated advocacy will be among clean power industries. And
transmission too, which is part of ACP's remit.
For the storage industry's specific interests … we are going to
see, for example, a storage investment tax credit and availability
of public and independent investments at a level playing field with
other energy options. And this will be at a scale that our country
needs for the challenges of upgrading our power supply and
integrating more parts of the economy. Tax credits are a key part
of meeting the pace of deployment needed for decarbonization.
In markets, I think that there already are implications in the
way we are ensuring that storage is able to access the grid. I
think we will have more thorough market designs to take advantage
of the flexibility storage provides and update to where technology
has gone. FERC Orders 2222 and 841 are a good start.
As ESA said after a federal court
ruled in July 2020 that FERC Order 841 could be issued, enabling
with the affirmation that energy storage connected at the
distribution level must have the option to access wholesale
markets: "This is an enormous step for energy storage … allowing
homes and businesses to contribute to the resiliency, efficiency,
sustainability, and affordability of the grid."
FERC Order 2222, which opens wholesale markets to aggregations
of distributed resources, will just further push the storage
business model, because storage will be at the heart of many
aggregations—including as part of vehicle-grid integration.
Net-Zero Business Daily: It's not just federal policy
either.
Burwen: States have traditionally led the way
for power markets, and will continue to do, almost certainly. Three
quarters of what happens in power systems is regulated by the
states. We currently have nine states with storage targets. I would
like to think that with the combined resources of the ACP that we
expand that to half the country, just as renewable portfolio
standards expanded.
Deployment targets are important long-term signals because we
are making power system investments today that will last for
decades. It's not enough to build renewable capacity and assume
storage will show up when it's needed. Whether that's through
targets or other ways to compensate storage for the value it
provides, we need an accelerated agenda for meeting the country's
clean energy and decarbonization goals and for adapting power
infrastructure to climate change.
Net-Zero Business Daily: What about technology
development?
Burwen: When we think about the pipeline of
innovation coming, there are so many exciting technologies.
Lithium-ion batteries will be here for the foreseeable
future—and for good reason. But the next crop, whether it is
new forms of thermal storage, new types of chemistries, different
kinds of flow batteries, solid state, or other kinds—there are
a lot of folks who seem to be solving problems, such as duration,
achievable cost points, and system longevity. Five years down the
line, I think some of those will be more clearly ready for prime
time and deployed on power systems as part of the reliability
mix.
Posted 05 August 2021 by Kevin Adler, Chief Editor
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